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Thursday, August 13, 2015

The Guardian last night leaks details of the third Greek bailout agreement:

The Greek government is to surrender powers over vast areas of economic and social policymaking to its eurozone creditors under draconian terms agreed for a new three-year bailout.

The 29 pages of conditions concede ultimate authority over much of Greek policymaking to the eurozone and establish a system of quarterly reviews of the reforms by the troika of institutions – the European commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – representing the creditors…

The document states: “No unilateral fiscal or other policy actions will be taken by the [Greek] authorities. All measures, legislative or otherwise, taken during the programme period, which may have an impact on banks’ operations, solvency, liquidity or asset quality should be taken in close consultation [with the troika].”

According to the document, external consultants are to be sent in to advise Greece’s national bank on bad debts and asset management, while the board of the Greek authority dealing with banking revival is to be co-appointed by the troika to counter suspected cronyism and “political interference”…

The European commission, which negotiated the new deal over the past fortnight in Athens alongside the ECB, IMF and the European Stability Mechanism (ESM) – the EU bailout fund – is keen to combat German-led scepticism over the package and see it implemented swiftly for fear of a political backlash in Greece.

About Me

I'm a research economist at UNU-MERIT (Maastricht, The Netherlands) and IIASA (Laxenburg, Austria) with a specialization in the economics of innovation, complex dynamics, economic growth and evolutionary economics. By the 2008 world crisis at the latest it became clear that macroeconomics, financial markets and economic policy cannot be entrusted anymore to mainstream economists. Hence this blog.